Creating a Due Diligence Checklist

A due diligence checklist is a crucial component of the M&A process. It assists acquirers in avoiding costly and time-consuming surprises by revealing the business’s liabilities, troublesome contracts, intellectual property issues, litigation risks and more. It also helps them determine whether a deal is suitable from a culture perspective.

Making a Due Diligence questionnaire (DDQ) is a daunting undertaking, particularly for small-sized business owners who have never done it before. It is crucial to be thorough but not so much that the company can’t respond.

While the list of documents that could be requested is lengthy and diverse, a few essential requirements are typically included. Included are three to five years worth of financial reports, tax returns and insurance policies, contracts for employment and copies of the operating agreement or bylaws.

These can make the DDQ more efficient both for the seller and the buyer. Additionally, it will reduce the risk of sharing sensitive information without appropriate security measures in place.

The due diligence process may click this site about financing mergers be stressful, but with right planning it can be as simple as it is possible. Work with your M&A advisor to identify the types of documents buyers are likely to request and have those documents ready before the sale process can move forward quickly. For more information on how to prepare your company for an effective sale, contact the Allan Taylor & Co team today!






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